MediaShift filed with the U.S. Bankruptcy Court a motion for an order (1) authorizing and directing the distribution of funds of the estates to creditors and (2) dismissing the Debtors’ Chapter 11 bankruptcy cases.
The motion explains, “The Debtors submit that ’cause’ exists for the relief requested in the Motion because, (a) the Court-approved sale of substantially all of the Debtors (the ‘Asset Sale’) only generated net proceeds sufficient to make a pro rata distribution on administrative claims, (b) after the Asset Sale, the Debtors’ remaining assets consisted of the net proceeds from the Asset Sale, and other cash held by counsel in trust for the Debtors, and certain litigation claims, (c) after an extensive investigation by the Official Committee of Unsecured Creditors (the ‘Committee’) of alleged potential litigation claims against certain of the Debtors’ current and former directors and officers (the ‘D&O Claims’), the Committee informed the Debtors that the Committee did not believe that any viable, cost-effective D&O claims existed, (d) the Debtors are unaware of any other viable, cost effective litigation claims that exist that would result in a net benefit to the estates, particularly after considering fees and expenses that would be incurred in pursuing litigation claims and the additional costs of administration that would be incurred while such claims were pursued, and, therefore, (e) no further purposes would be served by prolonging the Cases and seeking confirmation of a liquidating plan other than to diminish the pro rata distribution to be made to administrative creditors, which would prejudice such creditors, and (f) likewise, converting the Debtors’ Cases to Chapter 7 would also prejudice administrative creditors by adding a layer of additional Chapter 7 administrative claims further reducing the current projected pro rata distribution on the allowed administrative claims set forth in the Distribution Chart, and (2) in addition to the foregoing facts supporting dismissal, the Committee has advised the Debtors that it has no objection to the dismissal of the Debtors’ Cases and the related disbursement of remaining funds requested pursuant to the Motion, which weighs heavily in favor of granting such relief.”
The Court scheduled a September 20, 2016 hearing to consider the motion. Read more bankruptcy news.
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